Exxon Mobil Corporation (XOM - Free Report) recently announced plans to increase production through further investment in Block 15 offshore Angola. The company signed an agreement with National Agency for Petroleum, Gas and Biofuels of Angola to redevelop the block.
Notably, the block has produced more than 2.2 billion barrels of oil since 2003. The redevelopment process is expected to add around 40,000 barrels of oil per day to its existing production. The company plans to install new infrastructure technology at the site, which will likely increase the capacity of prevailing subsea flow lines. Moreover, the redevelopment is expected to create 1,000 jobs during the execution period.
The deal extends operations in the block through 2032. Per the agreement, Angolan state-owned energy company Sonangol holds a 10% interest in the partnership at the block. ExxonMobil has a 36% stake in the project. It is partnered by BP p.l.c. (BP - Free Report) , Eni S.p.A. (E - Free Report) and Equinor ASA (EQNR - Free Report) with respective interests of 24%, 18% and 12%. The move will enable the companies involved in the project to optimize recovery and increase output from mature fields.
ExxonMobil has stakes in three deep-water blocks in the country with almost 2 million gross acres. The company estimates the blocks to have a gross recoverable resource of around 10 billion barrels of oil equivalent.
Notably, Italian energy major Eni recently announced the fifth oil discovery in the past 12 months in the prolificdeep-waterBlock 15/06, which is close to Block 15. The discovery occurred at the Agidigbo exploration prospect. Post-drill results are indicating that 300-400 million barrels of light oil is in place.
The discovery made by Eni in Block 15/06 and ExxonMobil’s reinvestment program in Block 15 will likely give a positive push to Angola, as aging fields and the lack of foreign investments resulted in lower hydrocarbon output, thereby affecting the country’s exports. Notably, Angola, the second-largest producer in Africa, is a member of Organization of the Petroleum Exporting Countries or OPEC.
Price Performance & Zacks Rank
ExxonMobil, the largest publicly-traded energy company, has gained 7% year to date compared with 4.4% collective gain of the industry it belongs to. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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